recent posts

Investors and policy makers are looking at new ways to monitor the financial crisis. After Lehman failed last September, there were clear metrics. For example, the spread between LIBO and the Overnight Index Swaps (OIS) and the spread between T-bills and LIBOR (TED spread) were widely used. While these metrics, popular thermometers for gauging the…

Monitoring the Crisis
Reviewed by magonomics
on
January 29, 2009
Rating: 5

I. The Federal Reserve Open Market Committee holds a two-day meeting this week, with the outcome anticipated near 2:15 pm on Wednesday, January 28. There is little doubt that the Fed funds target of 0-25 bp will be retained. The accompanying statement will receive the market’s full attention. II. The data since the mid-Dec FOMC meeting has been dre…

Thoughts on the FOMC: Ten Points
Reviewed by magonomics
on
January 26, 2009
Rating: 5

There is no doubt that the advanced industrialized countries are deep in an economic downturn. Given that consensus expectations continue to overshoot the actual data, it appears that many still do not fully appreciate the magnitude. The fact that policy makers continue to cut growth forecasts implies they too have not appreciated the depth of the…

A Crisis with Chinese Characteristics
Reviewed by magonomics
on
January 23, 2009
Rating: 5

Shortly after Barrack Obama is sworn in next week as the 44th President of the United States, the strong dollar policy turns 14 years old. It may not be much of an exaggeration to suggest as goes Obama’s dollar policy so goes his Administration. This is not to endorse overly simplistic notions that the dollar is like stock in America. There are a m…

The Future of the Strong Dollar Policy
Reviewed by magonomics
on
January 16, 2009
Rating: 5

There is a parable about the human condition that is particularly apropos for investors in the current investment climate characterized by high volatility and great uncertainty. Five blind men walking through the jungle stumble on an elephant. But of course they don’t know it is an elephant because they are blind. One feels the tail and say’s it i…

Feel the Elephant
Reviewed by magonomics
on
January 09, 2009
Rating: 5

Early word from the G8 meeting, like the EU fin min meeting, is that officials recognize that it is premature to enact exit strategies from the emergency facilities and actions to address the economic and financial crisis. The BOJ is the next major central bank to meet. It will hold its meeting on July 14th-15th. Its current program, which include…

No Exit For Japan
Reviewed by magonomics
on
January 07, 2009
Rating: 5